Savings banks claim a new set of victims: Staff

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Savings banks claim a new set of victims: Staff

As most of the savings banks suspended in 2011 find new owners, their employees are emerging as additional victims of the crisis - many are increasingly in danger of losing their job.

Some banking groups that have acquired defunct savings banks are moving to cut workforces or transfer workers to temporary contracts in order to restructure their operations with depleted assets.

Clean-up operations from last year’s crisis are already in full swing, and 10 of the 16 suspended banks have been sold to new owners or are due to pass the bidding process this month, according to the Korea Deposit Insurance Corporation.

With financial holding companies having acquired a major portion of these suspended banks at the government’s request, depositors can look forward to the resumption of business in the near future.

However, this has not been such pleasant news for the employees of these savings banks. Hana Financial Group, chosen as the preferred bidder to acquire the remnants of Jeil II and Ace savings banks, interviewed 100 staff from both banks on Monday before reviewing the balance sheets from today.

Although a spokesperson for Hana Financial said yesterday it was too early to discuss personnel changes before the review began, an employee of Ace Savings Bank told Yonhap that “a substantial number of employees have already succumbed to anxiety and moved to other savings banks or other second-tier financial companies.”

KB Financial Group, which has acquired and renamed Jeil Savings Bank as KB Savings Bank, has reportedly made it company policy to only keep a certain number of employees in proportion to the companies’ assets.

“Jeil Savings Bank, which has 200 employees, has fewer assets than a single branch of Kookmin Bank with 20 to 30 employees,” said an official of KB Financial Group. “We cannot accept a workforce of this size, so it is inevitable that some will be hired at temporary workers.”

At Tomato Savings Bank, now acquired by Shinhan Financial Group, 30 of its 160 employees have been relocated to bankruptcy management operations and given 10 percent paycuts, with slim prospects of returning to their former positions.

However, there are exceptions. Woori Financial, which acquired Samhwa Savings Bank early last year and renamed it Woori FG Savings Bank, has made almost all of its temporary workers into full time staff.


By Lee Jung-yoon [joyce@joongang.co.kr]

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